Malaysia Stock Investment 101: Glossary ๐Ÿ“—๐Ÿ”

Glossary of Investment Terms

A brief glossary explaining common investment terms like P/E ratio, dividend yield, and stop-loss orders can be a helpful reference for beginners. This will help you sound like a pro at your next family gathering! ๐Ÿ˜œ
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Core Investment Terms

  • Annual Report: A yearly financial statement issued by a company to its shareholders.
  • Asset Allocation: The distribution of investment funds across various asset classes.
  • Bear Market: A prolonged period of declining stock prices.
  • Blue-chip Stock: A stock of a large, well-established company with a strong reputation for stability and profitability.
  • Bond: A debt security issued by a corporation or government, promising to repay the principal amount with interest.
  • Bull Market: A prolonged period of rising stock prices.
  • Capital Appreciation: An increase in the value of an investment over time.
  • Dividend: A portion of a company's profits paid to shareholders.
  • Diversification: Spreading investments across various assets to reduce risk.
  • Earnings Per Share (EPS): A company's net income divided by its outstanding shares.
  • Market Capitalization: The total value of a company's outstanding shares.
  • Portfolio: A collection of investments owned by an individual or organization.
  • Price-to-Earnings (P/E) Ratio: The ratio of a company's share price to its earnings per share.
  • Stock (or Share): A unit of ownership in a company.
  • Volatility: The degree of price fluctuation in a security or market.

Investment Orders and Strategies

  • Limit Order: An order to buy or sell a stock at a specific price or better.
  • Market Order: An order to buy or sell a stock at the current market price.
  • Stop-Loss Order: An order to sell a stock if its price falls below a specified level.
  • Dollar-Cost Averaging: Investing a fixed amount in a particular investment on a regular schedule, regardless of the share price.
  • Rebalancing: Adjusting a portfolio to maintain the desired asset allocation.
  • Short Selling: Borrowing shares to sell, hoping to buy them back at a lower price and profit from the difference.

Investment Products

  • ETF (Exchange-Traded Fund): A fund that tracks an index, but trades like a stock.
  • Mutual Fund: A pool of money managed by professionals, investing in various securities.
  • Index Fund: A mutual fund that tracks a specific market index.
  • Option: A contract giving the holder the right, but not the obligation, to buy or sell an asset at a specified price.
  • Futures: Contracts to buy or sell a specific asset at a future date.
  • Real Estate Investment Trust (REIT): A company that owns or finances income-generating real estate.

Financial Analysis and Risk

  • Dividend Yield: The annual dividend per share divided by the share price.
  • Beta: A measure of a stock's volatility relative to the overall market.
  • Fundamental Analysis: Evaluating a company's intrinsic value based on financial performance.
  • Technical Analysis: Predicting future price movements based on past price and trading volume data.
  • Risk Tolerance: An investor's ability to accept market fluctuations.
  • Investment Horizon: The length of time an investor plans to hold an investment.
  • Liquidity: The ability to convert an asset into cash quickly.

Additional Terms

  • IPO (Initial Public Offering): A company's first sale of stock to the public.
  • Secondary Market: Where stocks are bought and sold after the IPO.
  • Bullish: Optimistic about the market.
  • Bearish: Pessimistic about the market.
  • Speculation: Investing in stocks based on anticipated price changes rather than long-term value.
  • Margin Trading: Borrowing money from a broker to invest in stocks.
Just give me a shout if I’ve skipped over anything, alright? ๐Ÿ“ข Don’t hesitate to chip in with your thoughts below. ๐Ÿ’ฌ

If you need any more help or have other questions, feel free to ask! ๐Ÿ˜Š

Disclaimer: All information in this blog is intended for general knowledge and informational purposes only, and does not constitute financial advice. It's essential to conduct thorough research or consult with a financial advisor before making investment decisions.

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